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The million-member Good Sam RV Club is teaming up with RV dealers across the country to establish a network of Good Sam Authorized Dealers that offers consumers a host of benefits and gives recreational vehicle retailers for the first time on a national scale a chance to tap into the considerable marketing clout of Affinity Group Inc., Good Sam’s parent company, to drive traffic to their dealerships.
The foundation of the program is the Good Sam Certified Pre-Owned program, a three-year-old initiative through which dealers obtain Good Sam Club endorsements on qualified used RVs undergoing thorough inspections and carrying 60-day warranties. This aspect of the program is modeled after certification formats developed over the past 10 years in the automotive industry, which has seen certified pre-owned sales leap to impressive growth levels – from 685,410 cars in 2001 to 1.58 million in 2004, according to Automotive News.
In addition to the certified component, dealers participating in the Good Sam Authorized Dealer program will give customers a “bonus package.” Included is a one-year membership or renewal in the Good Sam Club and President’s Club, a 60-day membership in the popular Good Sam Emergency Roadside Assistance program, a certificate good for a $40 rebate on gasoline, a Trailer Life Campground & Services Directory CD in addition to a year’s subscription or renewal to Highways, RV View and Trailer Life magazines plus a gratis copy of the best-selling book, “The RV Handbook.”
Good Sam authorized dealers, at the same time, are to benefit from a national ad campaign, web-based listings of dealers and their inventories, direct mail campaign assistance and point-of-sale signage and support material – including large floor displays, posters, signage and exterior banners – all tailored to drive consumer traffic to their stores. Also in the works is an effort to draw private sellers into Good Sam dealerships for vehicle inspections, certification and closing assistance.
The Good Sam Authorized Dealer program actually was developed three years ago in conjunction with Beaudry’s RV, and was tested and modified based on dealer and consumer feedback until this past March when Good Sam began carefully adding a handful of additional dealers.
“It all started with Beaudry,” Scott Blanc, vice president and general manager of AGI’s Continued Service Plan Division, told RV Business, an AGI publication. “It was really instituted at the request of former general manager Bob Burden as a way to have the Good Sam Club be the third-party endorser of their efforts as a dealer to provide a quality product to the consumer. Their desire was to use the strength of the Good Sam brand – which has the strongest recognition of any brand or trademark in the marketplace – and leverage it to validate the quality of their products and services. So we worked with Beaudry to come up with the certified pre-owned process along with a variety of marketing efforts that tie the dealer with the club and enhance value in the consumer’s mind.”
So far, Blanc and others report, the program is working well. Already signed up are Altmans Winnebago, Carson, Colton and Baldwin Park, Calif.; Beaudry RV, Tucson, San Marcos and Mesa, Ariz.; Bill Plemmons RV World, Rural Hall, N.C.; Dixie RV Superstores, Baton Rouge and Hammond, La.; Findlay RV Center Inc., Las Vegas, Nev.; Guaranty Family RV Center, Junction City, Ore.; Guaranty Luxury RV Showcase, Junction City, Ore.; Guaranty RV at the Garlic Farm, Gilroy, Calif.; Guaranty RV’s Desert Showcase, Indio, Calif.; Guaranty Trailer and Van Center, Junction City, Ore.; JC’s RV’s Inc., Livermore, Calif.; Marty’s USRV, Berkley, Mass.; Michael Hohl RV Center, Carson City, Nev.; Tennessee Outdoors RV, Crossville, Tenn.; Tennessee RV, Kodak, Tenn.; Tom Stinnett Freedom RV, Clarksville, Ind.; Vogt RV, Fort Worth, Texas; Wilkin’s RV, Hornell, N.Y.
The program has caught the attention of Costa Mesa, Calif.-based N.A.D.A. Guides, a used vehicle service of the National Automobile Dealers Association (NADA), which, at the time of this writing, was planning to list for the first time Good Sam Certified Pre-Owned vehicles in its RV Appraisal Guide. “We will provide a page or a section indicating what (Good Sam) certified vehicles are required to have,” explains NADA Vice President Lenny Sims.
“The NADA valuation of the program is a terrific independent validation of what we have experienced with the certified vehicles,” adds Blanc. “The increased resale value will now be recognized by lenders as well as consumers.”
By early October, in fact, 14 participating retailers already had sold nearly 6,000 towable and motorized units with a combined retail value of more than $225 million through the Good Sam Certified Pre-Owned program.
Now future plans call for the program to be expanded to create more of a national network of dealers, each with an exclusive territory based on RV population densities in a given zone.
How Does a Certified Pre-Owned Program Work for RVs?
The Certified Pre-Owned aspect of the program works something like this: Participating dealers conduct thorough inspections of each trade-in they consider worthy of certifying as a Good Sam Certified Pre-Owned Vehicle, based on an extensive checklist. The inspections help dealers determine the approximate dollar amount of repairs needed to bring a unit up to standards. Dealers can then determine whether they should keep the unit for resale, wholesale it or refuse to accept it altogether.
Those units that pass inspection – or are in a condition good enough that they can realistically be brought up to certified standards with reasonable repairs – are then marketed under the Good Sam Certified stamp of approval. As such, AGI spokesmen indicate, dealers have been reselling pre-owned units for as much as 12% more than they otherwise might have as a result of the extensive inspection – and resultant quality assurance – they are offering the consumer.
If units are properly screened by participating dealers, AGI’s management maintains, the markup is more than enough to cover the cost of repairs.
An essential component of this new program – a bonafide draw for the buying public – is the fact that units sold under the Good Sam Certified banner come with a 60-day warranty. “There are so many more things to go wrong with an RV (compared to an automobile),” explains Blanc. “You’ve got not only the drive train components. You’ve got essentially all the same components you have in your home, with the plumbing and electrical appliances and the heating and cooling elements of the RV. So this program encompasses those components as well as the drive train.”
As a result, Blanc adds, consumers have a much higher level of confidence in Good Sam pre-owned vehicles. “The program ensures that the consumer has peace of mind in buying the RV. He knows what he’s getting and that everything is in good operating order at the time of the sale,” he said. “It means they can expect this vehicle to be of a higher quality than the typical ‘as is’ pre-owned vehicle. And it comes with a warranty to back those standards up.”
What Participating Dealers Say About the Program
Dealers consulted by RV Business, for their part, seem pleased with the program. “When Good Sam first approached us, we thought, ’Why not do it ourselves?’” said Bill Schrieber, F & I director for Guaranty RV. “But we’re not as widely known as Good Sam is. I think it has enhanced our business to have this new program.”
Dave Altman, owner of Altman’s Winnebago, is also among the participating dealers who see merit in the Good Sam Certified Pre-Owned Vehicle program. “We were already screening used vehicles thoroughly enough,” he said. “We don’t sell the bad stuff. That just leads to attorney problems and unhappy customers. But we’re making the move (to join the Good Sam Certified Pre-Owned Vehicle Program) because we think it just enhances our ability to sell the units we have. It gives another layer of endorsement to the customer. And that actually gives me more value with the used coaches, which should generate more used profit.”
Beaudry also likes the way the program is working. “The inspection list alone is helpful and brings thoroughness and consistency to the company’s vehicle inspection process,” reports Glenn Cannon, Beaudry’s Tucson service manager. “It gives our employees a clear idea of what we do on used units. We’re screening units much more closely now before we take them in on trade.”
For example, Beaudry now requires consumers to deliver vehicles with the refrigerators turned on so that the dealership can immediately determine if the RV’s most costly appliance is working properly. “We will actually have a technician record the temperatures,” said Cannon, noting that all systems are inspected.
Only after the inspection do Beaudry personnel decide whether to keep or wholesale a given vehicle. “If we determine it takes too much work or if (the consumer has) misrepresented the vehicle,” Cannon said, “we will renegotiate the deal and wholesale the unit through an auction house rather than invest the money to work on it.”
For those vehicles that meet the Good Sam certification inspection standards, according to Cannon, increased sales revenues can be substantial. “We get at least 15% more for these units we refurbish,” Cannon said.
Added Benefit: Reduced Customer Service Issues
Selling higher quality used units, we’re told, also logically reduces customer service problems for dealers. Cannon estimates that the Good Sam program has cut Beaudry’s used unit complaints by at least 50%, even factoring in the real-life possibility that there’s always something that can – and often will – go wrong with a used vehicle, even after inspections and repairs. That’s where the 60-day warranty coverage kicks in.
“Usually in the first 60 days you’re going to find out a lot of things about that vehicle, either good or bad,” said Joseph Cartwright, Beaudry’s director of finance. “We have an inclusionary type warranty that tells the consumer specifically what types of things would be covered. For the first 60 days, it covers the major bumps and bruises. But it’s not going to take care of little things like a cosmetic problem on the inside of the coach. But if your transmission blows a gasket, it will cover something like that.”
The Good Sam warranty coverage, administered by United Service Protection Corp. of St. Petersburg, Fla., includes a $100 deductible, which drops to $50 if the consumer purchases extended coverage for a year or more. Cartwright said warranty coverage is useful because it helps ensure that the consumer’s experience with the dealer gets off to a good start. “That’s a critical time in which the dealer can develop a close relationship with the customer,” he said. “That, we feel, is critical to customers coming back to us.”
Not only do Good Sam dealers sell pre-owned extended warranties; they also have the opportunity to sell the Good Sam new unit extended warranty.
Of course, there are some costs involved in the Good Sam Certified Pre-Owned Vehicle program, which is available exclusively to Good Sam Authorized Dealers, says Blanc. Dealers are assessed $275 for each motorized unit and $125 for each towable unit marketed with Good Sam certification. “That covers the cost of administration of the program, advertising materials, program support through national TL publications and the costs of administering any claims during the 60-day period,” Blanc said.
However, those costs are minimal, he contends, compared to the return on investment in terms of both real dollars and customer satisfaction.
AGI, again, is currently planning to introduce its new Good Sam program to more dealers across the country. “We’re looking to partner with other quality dealers who will adhere to the standards set forth and want to take part in the marketing efforts that the Affinity Group offers,” said AGI President and CEO Mike Schneider.
Not only is Schneider clearly pumped about the program itself, but also about the natural spinoff effect of growing the Good Sam Club’s membership and related services, such as Good Sam Emergency Road Service. “We see this entire program as being consistent with other Good Sam products that create a ‘win-win-win’ situation for the consumer, for the dealer and for AGI.”